Minnesota state budget (2009-2010)
- 1 2009-2010 budget crisis
- 2 2008-2009 budget crisis
- 3 Budget background
- 4 Accounting principles
- 5 Budget transparency
- 6 See also
- 7 External links
- 8 Additional reading
- 9 References
Minnesota had a total state debt of $21,206,734,818 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.
2009-2010 budget crisis
In 2009 Gov. Tim Pawlenty stood his ground by closing Minnesota’s budget deficit without raising taxes. The Minnesota State Legislature passed the FY 2010 budget; however, the governor used his un-allotment power to modify it and presented the budget changes that went into effect July 1, 2009.
According to Gov. Tim Pawlenty's 2010 State of the State Address, the governor's "Jobs Creation Bill" included proposed tax cuts and incentives for the FY 2011 budget. Proposed cuts included: 20 percent reduction in the corporate tax rate, 20 percent exclusion from taxation for small businesses and tax credits for early-stage companies.
The legislature would be able to review Gov. Pawlenty's un-allotments when it convened on February 4, 2010, but would be constrained by ongoing decreasing revenues and an estimated $5.9 billion deficit for the FY 2012/2013 biennium. Minnesota's Management and Budget Office's First Quarter FY 2010 Revenue Report, released October 2009, showed:
- Individual income tax revenue July-September 2009 down 5.4%, $93 million from end of 2009 legislative session estimates
- Sales tax receipts July-September 2009 down 2.3%, $20 million from end of 2009 legislative session estimates
- Corporate income tax revenue July-September up 41.1%, $52 million from end of 2009 legislative session estimates
- Motor vehicles tax revenue July-September up 25%, $4 million from end of 2009 legislative session estimates
- Other revenues up 1.1%, $4 million from end of 2009 legislative session estimates
Total revenues for the first quarter of FY 2010 1.7%, $52 million below end of 2009 legislative session estimates
2008-2009 budget crisis
- See also: Minnesota state budget (2008-2009)
- See also: Minnesota state budget
Minnesota operates on a biennium, covering two fiscal years at a time. A fiscal year begins on July 1 and ends on June 30 of the following year; however, the biennium begins July 1 of odd-numbered years. The process of creating a new state budget begins in even-numbered years. All state agencies submit budget requests for the next biennium along with actual expenditures and receipts for the two most recent fiscal years. The governor then submits a three-part budget to the legislature. Part one is a budget message, part two a detailed operating budget, and part three a capital expenditures budget. Parts one and two are presented to the legislature in January or February of odd-numbered years and part three is presented to the legislature in January of even-numbered years. Both the House and the Senate examine, modify and enact the final budget.
- (a) If the commissioner [of finance] determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed, the commissioner shall, with the approval of the governor, and after consulting the legislative advisory commission, reduce the amount in the budget reserve account as needed to balance expenditures with revenue.
- (b) An additional deficit shall, with the approval of the governor, and after consulting the legislative advisory commission, be made up by reducing unexpended allotments of any prior appropriation or transfer. Notwithstanding any other law to the contrary, the commissioner is empowered to defer or suspend prior statutorily created obligations which would prevent effecting such reductions.
The following table provides a history of Minnesota's expenditures and gross domestic product (GDP).
|Fiscal year||Expenditures (billions)||GDP (billions)|
- NOTE: The figures for FY 2009 had not been finalized at the time this table was built.
Minnesota auditing authority is divided between the State Auditor and the Legislative Auditor. The Office of the State Auditor is a constitutional office that is charged with overseeing more than $20 billion spent annually by local governments in Minnesota, publishing its audit reports online. The Office of the Legislative Auditor audits state agencies and constitutional offices, and also publishes its audit reports online.
Rebecca Otto was elected Minnesota State Auditor in 2006. Jim Nobles had been the Legislative Auditor for the State of Minnesota since 1983, an appointed position under the Legislative Audit Commission. In addition to the office's primary focus on state agencies and programs, the office also audits three metropolitan agencies and selectively reviews programs that are administered locally.
Disregarding the mandate of Minnesota House File 548, State Government Omnibus bill (2007), Minnesota did not launch a spending database until March 2009 (over one year after the mandated launch date). According to an article in The Star Tribune, the Department of Administration had not launched the website because "an old state computer system, which was being updated, was not Internet-friendly. It's not clear if the new computer system will include a spending database because the legislature didn't appropriate the $1 million to $1.5 million needed for it."
The actual expense of building the site was far less than initially expected. Curt Yoakum, Legislative Liaison for the Department of Management and Budget in 2009, said that the spending database was developed with existing resources and a mere $5,000 consulting fee. The site's designers even overcame an antiquated accounting system that appeared unsuited to internet.
According to a press release from the Office of the Governor, "The site was created by Minnesota Management and Budget (MMB) and offers on-line, round-the-clock access to data on state payments for schools, local governments, contractors and other vendors. With just a few clicks, citizens can access detailed information on most state spending. The data is supplied by the state's accounting system and updated nightly."
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
|State database||Searchability||Grants||Contracts||Line item expenditures||Dept./agency budgets||Public employee salary|
Public employee salary information
- See also: Minnesota state government salary
Economic stimulus transparency
Minnesota would receive approximately $448 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.
The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments. Minnesota would receive an estimated $2,514,686,494.
Reports showed that 65 bonding projects had borrowed $684 million in stimulus bonds. The Freedom Foundation of Minnesota found that some of these projects included: municipal swimming pools, a multi-million dollar golf course renovation and a new mega-community center.
One Minnesota project was noted in Senator Coburn's and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. One project gave the towns of Woodbury and Eagan, Minnesota $1.8 million in stimulus funds for the heating systems at the local ice rinks.
Error in ARRP
The ARRP website created 11 new congressional districts in Minnesota, adding to its existing eight districts. The website listed Minnesota as having a total of 19 congressional districts. Altogether, the 11 extra congressional districts posted received more than $7 million in stimulus spending, creating or saving about 50 jobs.
- State Budget Solutions, Minnesota
- Taxpayers League of Minnesota
- Center of the American Experiment
- Freedom Foundation of Minnesota
- overview of state government spending, 2007
- language of Minnesota House File 548, State Government Omnibus bill
- Minnesota Government spending
- Gov. Tim Pawlenty, "2010 State of the State Address," February 11, 2010
- Gov. Tim Pawlenty, "2009 State of the State Address," January 15, 2009
- Star Tribune,"Legislature returns, staring into the teeth of $1.2B deficit," February 4, 2010
- KSFY.com "Pawlenty Threatens State Government Shutdown" May 8, 2010
- State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
- Wall Street Journal, "Pawlenty Garners Attention With Budget Move," July 11, 2009
- National Conference of State Legislatures, "Fiscal Year 2010 Budget Status," October 13, 2009
- Minnesota Governor,"2010 State of the State Address," February 11, 2010
- Minnesota State Legislature Web site, retrieved October 27, 2009
- Minnesota Management and Budget, "Consolidated Fund Statement: End of 2009 Legislative Session, Includes July 2009 Executive Actions ," July 17, 2009
- Minnesota Management and Budget Office, "FY 2010-11 Revenues 1.7 Percent Below Forecast," October 2009
- Minnesota Legislative Reference Library,"Resources on Minnesota Issues State Budget," December 2008
- Minnesota Management and Budget,"2010-11 Governor's Budget Instructions & Forms," accessed March 18,2009
- Minnesota Office of the Revisor of Statutes, "Minn. Stat. § 16A.152, subd. 4.," accessed October 27, 2009
- Minnesota House of Representatives Research Department, "Unallotment: Executive Branch Power to Reduce Spending to Avoid a Deficit," March 2008
- US Government Spending,"Minnesota State and Local spending," accessed March 17,2009
- Minnesota Office of the State Auditor Web site, retrieved October 27, 2009
- Minnesota Office of the State Auditor Web site, retrieved October 27, 2009
- Minnesota Office of the Legislative Auditor Web site, retrieved October 27, 2009
- Office of the Governor, "GOVERNOR PAWLENTY UNVEILS NEW STATE WEBSITE TO ALLOW CITIZENS TO TRACK GOVERNMENT SPENDING ONLINE," March 26, 2009
- Minnpost.com, "Many states, including Minnesota, lag in putting their spending on the Internet," February 27, 2009
- Star Tribune, "A blogger's quest: Where's the database?" May 15, 2009
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- National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- Wall Street Journal,"Stimulus Spending by State," March 12,2009
- Minnesota Communities go on Spending Spree Funded by Stimulus Bonds, July 28, 2010
- "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
- $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- Stimulus and Jobs, Freedom Foundation of Minnesota, November 16, 2009